Shinhan Bank, in partnership with LG Corporation’s IT division, has created a pilot blockchain-based platform for the national digital currency (CBDC) as part of preparations for its launch by the Bank of Korea, Yonhap reports.
The 1897-founded bank and LG CNS’s division have developed a virtual model in which the central bank issues the CBDC and financial institutions act as intermediaries.
“If the Bank of Korea issues a CBDC, an intermediary agency will be required for the seamless distribution and use of the digital currency. We have created it,” Shinhan Bank said.
The solution allows individuals to use the CBDC for payments, transfers, and foreign-exchange transactions.
The platform also separates individuals’ assets from government funds intended for emergency financing, using separate ledgers for them.
For example, in the event of government subsidies to victims of natural disasters, CBDC usage could be restricted or the digital currency could have an expiry date.
In the current year, the country’s central bank plans to complete the final stage of CBDC testing.
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